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No. 07-149


November 13, 2007





NRC AMENDS REGULATIONS TO EXTEND FINES FOR VIOLATING EMPLOYEE PROTECTION REQUIREMENTS TO ADDITIONAL ENTITIES



The Nuclear Regulatory Commission is amending its employee protection regulations to clarify its authority to impose a fine on contractors and subcontractors if they violate the NRC's regulations by discriminating against their employees for engaging in "protected activities."



The protected activities include providing information to the Commission or the employer about alleged violations of the Atomic Energy Act or the Energy Reorganization Act, refusing to engage in any practices made unlawful by these Acts if the employee has identified the alleged illegality to the employer, requesting the Commission to take action against the employer, and testifying before Congress or any federal or state proceeding on these subjects.



The amendments also allow the NRC to impose a fine on the United States Enrichment Corporation (USEC), as well as a contractor or subcontractor of USEC, if it discriminates against an employee for engaging in protected activities at its gaseous diffusion plants in Kentucky and Ohio . These plants are certified by the NRC rather than licensed.



The Commission's current employee protection regulations prohibit discrimination by those holding an NRC license for use of nuclear material, an applicant for a Commission license, a holder or an applicant for a certificate of compliance, or a contractor or subcontractor of these entities. Enforcement actions specified for violations of these requirements are denial, revocation or suspension of the license; imposition of a fine on the licensee or applicant; or other enforcement action. While these regulations prohibit discrimination by a contractor or subcontractor, they do not explicitly provide for imposition of a fine on a contractor or subcontractor.



The Commission emphasized that the amendments do not represent a change in its long-held view that licensees are responsible for maintaining control and oversight of contractor and subcontractor activities. There may be instances in which the Commission may wish to issue fines to both the responsible contractor or subcontractor and the licensee, such as in situations in which the licensee is aware of discrimination by its contractor or subcontractor and does not take immediate action to remedy the situation. Further, the Commission certified that this rule will not have a negative economic impact on a substantial number of small entities.



The amendments were published Jan. 31, 2006, as a proposed rule for public comment. The NRC received 3 comments, which are addressed in the final rule. The final rule was approved by the Commission Oct. 24 and will be published soon in the Federal Register. The amendments will be effective 30 days after publication.





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Thoughts on Seth Hettena’s
Feasting on the Spoils: The Life and Times
of Randy “Duke” Cunningham,
History’s Most Corrupt Congressman.

In case any of you reading this have been part of the crowd doubting the pressure many federal employees have had put on them by the wrongdoers both within their government offices and those in industry outside the government, consider that although threats on a person’s life may not be the norm, certainly, threats to destroy the career and/or take away employment and therefore that which provides a living are.

Mr. Hettena describes in Chapter 7, “Fat Fingers,” incidents in which insinuations were made that if certain federal employees did not dance to the demanded tune, they might suffer permanent silencing.

Here are some excerpts from Feasting on the Spoils. This one refers to contract work in Panama assigned to Brent Wilkes company, ADCS (automated document conversion system).

“A few days before a trip to Panama in March in 1999, Gary Jones, the Pentagon official overseeing the document-scanning program, came home from work to find his wife looking shocked and ashen-faced. “I just got a phone call that said that ‘you need to tell your husband to watch his back while he’s in Panama,’” Jones’s wife told him. Before leaving, Jones wrote down a whole bunch of names and put them in an envelope and told his wife that if anything happened to him while he was gone, she should open the envelope and get hold of the people whose names he had listed.”

Later while in Panama, Jones found himself further disturbed by a continuation of not very veiled threats:

“At dinner, Jones was seated next to a man he didn’t know. “You know,” the man told Jones, “I don’t know if you’re aware of this, but we have ways to keep people from ever leaving Panama. No one would ever know where they went.”

Jones was reportedly quite disconcerted and held himself hostage in his hotel room any time he was not in meetings, too frightened to go out, stating he’d worked for the government thirty-two years and never experienced anything as ugly as this before.

Another government official, Paul Behrens who also flew to Panama to inspect ADCS’s work, also had an unsettling experience:

“He was met at the airport by Wilkes and his entourage. As they walked out of the airport, Behrens heard Wilkes say, apropos of nothing, ‘Boy, you guys know that people can just disappear in foreign countries?’ Behrens took it as a clear threat, and he relayed the remark to the Defense Inspector General’s Office and the Army’s Criminal Investigative Division, but was told that no action could be taken since it did not constitute a ‘specific threat.’ ”

I have had incidents brought to my attention by “whistleblowers” (or more accurately, federal employees (or even sometimes contractor employees) trying to stand up to wrongdoing), even here in the states brought about by certain overzealous and ambitious contractors which serve as further examples of threats or intimidation brought about on federal employees, or of even employees of the various contractors making the threats. In some cases, apparently intimidation with words has moved to stalking, being followed home from the workplace, or even physical threat and violence, with the predictable outcome. (One employee of a contractor was actually beaten by thugs, and another government employee had her well contaminated with radioactive waste by the wrongdoers.) And due to the many inappropriate relationships between some of those in industry with some of those in government, (often some level of management), the employees have not been protected, but rather the corrupt practices have been protected and allowed to grow ever more ugly.

Later in the same chapter, Hettena explains the rise of Mitch Wade’s involvement with his business MZM. Here is an excerpt:

“Wade left the Pentagon in 1992 and started MZM Inc. out of his apartment in Arlington, Virginia. As a contractor, he possessed badges or identifications that allowed him to get in and out of the National Security Agency, the Central Intelligence Agency, and the Defense Intelligence Agency. In 1996, Wade had allowed his top-secret security clearance to lapse, although Army intelligence kept a top secret clearance for him at the National Ground Intelligence Center in Charlottesville, Virginia, according to MZM’s former security officer.”

The problem of having contractors have better access to things that are governmental than the very federal employees assigned oversight duties is not unusual. And this problem has become increasingly worse over the past eight years or so. Interference in government business by contractors has also increased. Mr. Hettena describes one machinization in 1999.

“One of Wade’s principal contacts in the Defense Department was Robert Fromm, a small, paunchy man with fading hair who worked at the Army’s National Ground Intelligence Center in Charlottesville, Virginia. In 1999, according to Wilkes, Wade wrote a letter to get rid of Paul Behrens, a government-contracting official who was becoming a thorn in his company’s side. Behrens was replaced by Fromm.”

Pressure on government officials, and offices to isolate, force out or fire oversight employees not willing to “play the game” and who insist on ethically doing their oversight job, is not uncommon according to sources I’ve heard from in recent years. And when diligent employees are forced out, “yes” men or women are placed in their empty positions - employees who will not look for nor comment on problems or irregularities. Hettena writes of this also.

“To key government contracting officials, Fromm seemed to be too close to ADCS and Wade. ‘Once Bob got involved, all I knew is that everything was acceptable. There were no problems. He would sign off on every invoice. Everything was happily ever after,” Gail Cotton said.”

Hettena continues with a story that gets much worse, as the contractors turn on each other in a frenzy of competitive greed with MZM and ADCS trying to eliminate each other from the playing field.

How money and billing and adhering to the provisions and timelines of contracts also is often irregular in cases where there is little legitimate oversight, as this excerpt shows:

“ADCS continued to wring as much money as it could out of the government. In a June 2, 1999, e-mail titled ‘Remaining funds,’ Wade wrote to Wilkes and others that $264,356.24 was left to be spent on the Panama contract and instructed company officials to prepare a bill of materials for that amount. ‘More blood from the turnip!!!’ Wade wrote.”

“By December 14, ADCS had still not finished all its work under the contract. The Panama contract also covered smaller projects, including a digital library at Camp Pendleton, a sprawling Marine base north of San Diego, and with one-day left of the contract, the company still had more work to do. Things were getting dicey: if government contracting officials learned that the company had not finished its work at the Marine base, it could be trouble. ‘We don’t want the government “talking” with them [Marines] for fear it would delay and complicate things,” ADCS vice President, Mike Williams wrote in an e-mail.”

“Wade had a solution. He instructed Williams to draft a letter for a Marine official to sign stating that ADCS had completed its work. ‘Signed …muckity-muck,” Williams wrote. ‘That’s all that needs to be said.” The muckity-muck, a Marine colonel, signed the letter a few days later, praising the company’s outstanding services. The letter went to Bob Fromm, and ADCS quietly finished its work after the contract deadline had passed.”

From there, oversight was continually undermined until a way was found to remove federal employee’s oversight of the programs altogether. The trend in the 1990’s to “Let Contractors police themselves” continued to head the business of contracting out government work further “south.”

Hettena writes that ADCS no longer was under the direction of Pentagon officials such as Gary Jones and others. The program had adopted a new name, Global Infrastructure Data Capture, and Congressman Cunningham had earmarked millions of dollars to have Wilkes and his employees do their work scanning information at the National Ground Intelligence Center. He further explains, “the switch had been engineered with Wade’s friends at the national Ground Intelligence Center and Congressman Cunningham’s help.”

Through these under the table negotiations, “an entirely new program was created in 2000, giving ADCS a fresh start away from the scrutiny from the Defense Department Inspector General’s Office.”

These manipulations created new opportunities for Wilkes and his cronies. “Changing the nature of the program held several advantages for Wilkes. Too many people were involved in the previous program, too many members of Congress with an interest in squeezing money out of it. It also meant avoiding oversight from pesky government officials like Gary Jones and Paul Behrens.”

Although all of this is graphically disturbing, unfortunately, similar scenarios exist, I am told from other government oversight employees, involving other types of government contracts with various other defense contractors.

Hettena reports that Congressman Cunningham tried to get Cheryl Roby, a higher ranking Defense Department official fired when she had “moved $3 million away from the Global Infrastructure Data Capture program, and reallocated it, believing that the money would be better spent on creating databases that would improve the Defense Department’s ability to use the scanned images.” Wilkes, upon finding he’s been “robbed” of the $3 million, set Cunningham and his staff onto Roby.

The further mixing of contractor employees with federal employees, in a mash of revolving door conflicted relationships continued to get worse. Hettena reports that after the September 11, 2001 attacks, more changes were accomplished. Prior to 9/11, the branches of the services had their own counterintelligence branches, which worked independently of each other. After 9/11, the Pentagon built “a new agency with sufficient resources and power to make sense of this confusing picture.” This equated to a rapidly growing new agency, the Counterintelligence Field Activity, which was infiltrated by employees of MZM, a defense contractor, and made for a cozy controlled environment for Mitch Wade and his MZM cronies. Furthermore with the influence and power of the likes of Congressman Cunningham, the agency grew rapidly into a large and powerful agency quickly reaching a state of complexity, which made it even more impossible to oversee and manage. And based on the growing number of “whistleblowers,” it appears conditions in government contracting have not improved.

I have chosen select quotations to illustrate the problems so inherent in government contracting today. Sadly, it is far worse than described here. Mr. Hettena has done a masterful job with his book. It is only the tip of the iceberg, as many federal and defense employees can attest to.

Hettena’s book is a must read for those who care about integrity in government and contracting, whistleblower or not. It is packed with information beyond what I have shared here and is a smooth read. I highly recommend it. -GFS

Feasting on the Spoils: The Life and Times of Randy “Duke” Cunningham, History’s Most Corrupt Congressman, St. Martin’s Press. ISBN-13: 978-0-312-36829-6

I recently finished reading Scott Hettena’s book: Feasting on the Spoils: The Life and Times of Randy “Duke” Cunningham, History’s Most Corrupt Congressman. (St. Martin’s Press, ISBN-13: 978-0-312-36829-6

Previously, in several posts on this blog, I shared observations and/or concerns about Ms. Carol Haave in her various roles within DOD and DSS. I found interesting information in Mr. Hettena’s book related to Ms. Haave’s involvement in the story of DOD/DSS’s interactions with MZM and it’s founder Mitch Wade, and his associates. It is not only the appearance of self-serving behavior, on the part of government and industry officials, but of inappropriate influence of industry on government officials who allegedly have responsibility to assure integrity and ethics in business and contracting, as well as the continuing problem of the use of the “Revolving Door” between industry and government which allows very inappropriate actions to occur that are not in the best interests of either the government or the tax-payers. -VM

Here is an excerpt from Chapter 10, “The Dream Home.”

Almost as important as the funding Cunningham and Goode generated for MZM was the influence they could wield over Defense Department officials. In this respect, Cunningham and Goode were little more than puppets for Wade, who would turn to them, just as Wilkes had, when he needed to squeeze money out of the sluggish Pentagon bureaucracy.
One of Wade’s employees, Scott Rubin, spent nine months in the office of a senior defense official in the Pentagon’s E-ring and got to see firsthand how this worked. Rubin had been detailed to the office of Deputy Undersecretary Carol Haave to help her out with her administrative work. Haave oversaw counterintelligence programs for the Defense Department, including the Counterintelligence Field Activity and the Defense Security Service, which was responsible for granting top-secret clearances. Her boss, Stephen Cambone, the undersecretary for defense intelligence, was widely viewed in the Pentagon as Donald Rumsfeld’s henchman and was loathed and feared by the services.
Wade was happy to have his own people inside Haave’s office. He dealt directly with Haave, although he wasn’t the only military contractor who did so. Wade attended a number of meetings in Haave’s office, and Rubin would sometimes escort him into the Pentagon so he could meet with her. Wade and Haave would discuss congressional mandates for the programs Wade was interested in at the Counterintelligence Field Activity and the Defense Security Service. Wade’s company was not only benefiting from these mandates, but he was arranging them through Cunningham.
A former special investigator for billionaire Howard Hughes’s company, Haave had, before joining the Pentagon, run a defense contracting firm, Sullivan Haave Associates, with her husband, Terry Sullivan, who was well-known by senior officials at the Pentagon. The Center for Public Integrity, an investigative Web site, had discovered that Sullivan Haave had a contract to spend four months in 2003 in Iraq providing advice to various ministries being set up there by coalition and local authorities. Terry Sullivan said the contract had nothing to do with his wife’s position at the Pentagon.
The Center for Public Integrity’s findings on Sullivan Haave were part of a package of stories titled “Windfalls of War,” which also included a report on MZM Inc. Wade bragged to the center that he expected to increase sales from $25 million to $120 million and hire 230 more employees in the next five years. To Wade, it seemed funny that he was getting rich off war. Following the publication of “Windfalls of War” in October 2003, Wade had a meeting in Haave’s office. “Hey, Carol,” he said, “how are you doing? Looks like we made the paper the same week.”
Haave’s deputy was a woman named Heather Anderson, the acting director of the Defense Security Service. Wade got impatient at the speed at which money for Project Goode was moving through the bureaucracy. Good had added a brief description of the Foreign Supplier Assessment Center into the Defense budget, but Anderson pushed back and asked Congress to provide more clarity about exactly what the project was all about. The delay only seemed to infuriate Wade. He called up Haave’s office and spoke with Rubin and told him to light a fire under Anderson. “You tell that dumb bitch to go fix it or she’s done for,” Wade said.
Rubin told his boss that he needed to be patient, but Wade didn’t heed the advice. A few days later, a staffer from Goode’s office called to speak with Anderson about the money for the Foreign Supplier Assessment Center. Rubin said Anderson was furious. “Your company’s over it’s head,” she screamed at him. Anderson says she was never pressured by Wade or congressional staff on his behalf. She denies making the remark to Rubin.
Wade was often frustrated with the Pentagon bureaucracy. A few months later, Rubin took a call from Wade, who asked if a multimillion-dollar appropriation for a classified program at the Counterintelligence Field Activity had moved through the Defense Department bureaucracy. When Rubin told him he didn’t think so, Wade got angry and said, “it better goddam happen or I’m going to have the congressman call and it’s going to get very bad over there for some people.”
Rubin told Wade he didn’t need to do that. “Let me just check on some things before we start breaking out the cannon,” he told his boss.
“No, “ Wade said, “I’ve run out of patience. I need an answer yesterday. This has to happen.”
Less than two hours later, Rubin took a call on the main line in Haave’s office.
“This is Congressman Duke Cunningham. I’d like to speak with Ms. Carol Haave, please.”
Rubin placed the congressman on hold and ran around his desk to speak with Haave, who took the call right away. The conversation lasted a few minutes, and then Haave came out of her office, stopped at Rubin’s desk, and told him to bring her two of her subordinates responsible for counterintelligence. Rubin brought the two men to Haave’s office, and the three held an emergency meeting to figure out what to do. The meeting lasted a half-hour and the two men walked out with actions items.
At the time, Rubin didn’t think that Cunningham was doing anything wrong except perhaps paying too much attention to a bozo like Wade. Only later would Rubin learn that he had been taken in by the congressman. “You listen to the Duke talk of loving the country and caring about the war, caring about the troops, caring about weapons,” he said. “He was in the military once before, he ad been on the front lines once before, and he probably thought to himself when he was a lieutenant commander/commander, ‘I wish I had the power to rankle that jackass in charge.’ It seemed that’s how he was coming across. Not so much that Mitch was making him call. It seemed to me that Mitch was just kind of filling him in, stoking him. That’s the way I saw it.”

I just finished reading a very good book and recommend anyone interested in Whistleblowers and in Government corruption read it as quickly as possible:

Feasting on the Spoils (The Life and Times of Randy "Duke" Cunningham, History's Most Corrupt Congressman) by Seth Hettena, St. Martin's Press, ISBN-13: 978-0-312-36829-6

I will be referring to and discussing some of what I've learned in future posts. Let me know what you think.

I hope everyone had a restful holiday and is renewed to continue the good fight.

VM